Brainhunter Technology Provides Distinct Competitive Advantage
TORONTO, ONTARIO--TrekLogic Technologies Inc. ("TrekLogic") (TSX Venture: TKI) is pleased to announce that it reached an agreement February 18, 2003 with Brainhunter.com Ltd. ("Brainhunter") to acquire one hundred percent (100%) of the issued and outstanding share capital of Brainhunter. Due diligence has now been finalized, and the acquisition is subject to completing final closing documentation, regulatory approvals for the issuance of common and preferred shares, and final approvals by both TrekLogic and Brainhunter Boards of Directors.
Brainhunter will provide TrekLogic with a very distinctive competitive advantage in executing a disciplined growth strategy within TrekLogic's Staffing Division. When combined with TrekLogic's existing business and the InBusiness Solutions Inc. acquisition announced March 7, 2003, consolidated historical sales exceed $35.0 million, with significant profitability, which is expected to increase materially as synergies are realized.
About Brainhunter.com Ltd.
Brainhunter is a web-enabled end-to-end recruitment technology platform designed to improve workflow effectiveness and minimize staffing costs. Brainhunter 's fully integrated staffing management portal provides a robust technology to automate recruiting, manage staffing vendors and capture, edit, store, retrieve and share critical information about recruiting human capital. Brainhunter offers an enterprise wide solution organized into multiple distinct but integrated business applications / models as follows:
i. Self-Serve staffing agency - a web-enabled staffing platform that provides an automated recruiting solution, internally and externally;
ii. CareerSite - a job board technology platform;
iii. TalentFlow - a resume management and applicant tracking software solution; and
iv. Vendor Management - a solution to automate the management and use of outside staffing suppliers.
Brainhunter targets a broad range of clients across all major industries, job functions and geographic locations, including Fortune 1000 clients and emerging growth companies utilizing skilled or professional labour. Brainhunter offers full-time and contract placement of candidates, applicant tracking database management and vendor management software. Brainhunter surpasses the level and scope of services provided by competitive firms by offering technical, skill testing, computer based training and dynamic interview booking on-line, as well as drug testing, and criminal records and background checking, with results delivered on-line.
The system is entirely web-based, robust, standard-based and scalable. Each of the modules can operate on a stand-alone basis or fully integrated with each other. The core proprietary technology for Brainhunter is the database engine that captures, screens, and presents candidates to clients in an accurate and timely manner. The system is rules-based, and relies on translating recruiting and screening techniques capturing over 100 person years of recruiting expertise developed into automated screening algorithms. The database uses both structured (SQL) searches on quantitative information (e.g. number of years of experience of a particular skill) and text processing from information stored within resumes along with a number of techniques to pre-screen and rank candidates.
TrekLogic's Business Strategy is focused on developing High Value Added Technology Services built on Distinct Competitive Advantages. The Brainhunter technology solution provides TrekLogic's Staffing Division with a Sustainable Competitive Advantage that increases revenue opportunities, reduces costs and provides a high value business proposition that enhances customer retention. Effectively, the Brainhunter technology, particularly when combined with the TrekLogic solutions expertise, allows TrekLogic to execute a high growth consolidation strategy in the staffing industry -- Faster, Cheaper and Better. Increased revenue will result from higher quality of candidates, faster response and delivery times, faster and better matching of candidates to jobs, broader market coverage and deeper client penetration. Costs will be reduced on all fronts including sales and marketing, recruiting, candidate acquisition and infrastructure. This end-to-end integrated supply chain solution will provide master vendor capability that puts competitors at a significant disadvantage, reduces customers' total staffing costs, enhances customer penetration strategies and customer retention, allows TrekLogic better control over its gross margins and enhances TrekLogic's relationship with the contract-based personnel deployed by TrekLogic with customers.
About the Purchase Price
TrekLogic has agreed to purchase Brainhunter for a net consideration of $4.1 million (after accounting for working capital adjustments), made up of $1,691,000 net cash, approximately $1,109,341 in convertible preferred and common shares of TrekLogic at a value of $0.50 per share, and three-year zero interest Vendor Take Backs totalling $1,298,749 of which $840,367 is paid in cash as a percentage of revenue over time, and $458,382 paid in TrekLogic shares at the prevailing market price of the TrekLogic shares three (3) years from closing.
About TrekLogic Technologies Inc.
TrekLogic is an Information Technology ("IT") Services company providing software solutions and IT and engineering contract staffing services to a high profile client base in Canada and the United States. The software solutions business is primarily in the U.S. and is built around a number of high value-added specialty practice areas where TrekLogic has a competitive advantage, either due to specialized expertise or proprietary software tools used in the provision of services. The contract staffing business is focused on the Toronto and Ottawa markets and is centered around a number of long-term corporate and government relationships.
TrekLogic has a history of strong profitability with a debt-free balance sheet and a positive working capital position of $1,449,142 at fiscal year ending September 30, 2002. TrekLogic's working capital position as at December 31, 2002 further improved to $1,809,675. Pre-tax profitability for the year ending September 30, 2002 was $1,704,969 or 26.3% of revenues, translating to $0.08 per common share. Pre-tax profitability for the first quarter ending December 31, 2002 was $395,153 or 18.3% of revenue, translating to $0.018 per common share. The first quarter is traditionally TrekLogic's weakest quarter due to the Christmas season. Tax loss carryforwards, from companies acquired, eliminate any requirement to pay taxes. For more information on TrekLogic, please contact the TrekLogic website at www.TrekLogic.com.